TMI Blog1987 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits. Originally, the assessment on the assessee-firm was finalised on October 8, 1970, accepting the return filed on July 28, 1970. Later, the assessment was reopened under section 147(a) of the Income-tax Act and a return was filed admitting an income of Rs. 32,828. The reassessment was completed on November 14, 1974, on a total income of Rs. 32,830. Regarding the concealed income with reference to the original return, the Income-tax Officer levied penalty of Rs. 15,000 under section 271(1)(c) of the Act. On appeal, the Appellate Assistant Commissioner confirmed the levy of penalty. On further appeal before the Tribunal, the contention is confined to the jurisdiction of the Income-tax Officer to levy penalty. The contention is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned by section 274(2) of the Act. Section 274(2) provides that if minimum penalty leviable exceeds Rs. 1,000, the matter has to be referred to the Inspecting Assistant Commissioner who alone was competent to impose the penalty. By Act 42 of 1970, section 274(2) was amended whereby the monetary limit for the purpose of levy of penalty by the Income-tax Officer was raised to Rs. 25,000. If the contention of the assessee is accepted that the law prevailing on July 28, 1970, has to be applied, the Inspecting Assistant Commissioner is the competent authority to levy penalty and the Income-tax Officer has no jurisdiction to levy penalty. Essentially, the question that has to be considered is whether the proceedings for levy of penalty are govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is relevant. It is wholly immaterial that the income concealed was to be assessed in relation to an assessment year in the past." In Addl. CIT v. Dr. Khaja Khutabuddinkhan [1978] 114 ITR 905, the Division Bench of this court held that the penalty under section 271(1)(c)(iii) of the Income-tax Act has to be levied in the light of the law existing at the time when the offence for which penalty is levied was committed and as such the date of filing the return in which concealment of income took place would be the relevant date to be taken into account for the purpose of computing the quantum of penalty, but not the date of completion of the assessment or the satisfaction of the Income-tax Officer as to the concealment of income or lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of income from undisclosed sources, penalty proceedings were initiated under section 271(1)(c) and the order levying penalty was passed on October 9, 1973. This order was confirmed by the Commissioner. Thereupon, the assessee moved a writ petition contending that the Income-tax Officer did not have any jurisdiction to levy penalty in view of the provisions of section 274(2) prior to the amendment by the Act 42 of 1970. In the context of considering whether the Income-tax Officer had jurisdiction to levy penalty, the Madras High Court held that the date when the offence or infringement takes place will be the relevant date for the purpose of finding out the law that is applicable for initiating or levying the penalty and it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiation of the penalty proceedings as also the date of final order are relevant as far as these cases are concerned, on both these dates the Income-tax Officer had jurisdiction. We respectfully disagree with the view expressed by the Madras High Court." In R. Abdul Azeez v. CIT [1981] 128 ITR 547 (Kar), the Karnataka High Court again held that the date of concealment does not determine the jurisdiction of the officer. In CIT v. Varkey Chacko [1982] 136 ITR 733 (Ker), it was held that the principle that the penal liability of a person in respect of an offence committed by him is governed by the law actually in force on the date of the commission of the offence cannot have application in determining which authority is competent to initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the proceedings does not arise. In so far as the question of penalty and the material constituting the base and violation for levy of penalty are concerned, the law as on that day is applicable. On the date of filing the return, the concealment is crystallised by non-disclosure of correct particulars and, therefore, the applicability of law on the date of filing the return is relevant. Section 274(2) of the Act prior to and subsequent to the amendment furnishes a clue to the interpretation. Before amendment of section 274(2), the competence of the Income-tax Officer to initiate proceedings rested upon findings regarding concealment and the quantum of penalty leviable. After amendment in 1970 of section 274(2), the jurisdiction to levy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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